hi, everybody. welcome to the "wall street journal report." i'm maria bartiromo mow. it's all about the benjamins. ben bernanke, that is. >> does that mean extending the tax cuts? my controversial interview with bill clinton about tax cuts, private equity and why the white house wasn't happy about it. secrets to a successful start-up. my conversation with the founder of luxury e-tailor, guilt group. and what went right? the "wall street journal" begins right now. here's look at what's making news as we head into a new week on wall street. we're ready but we're not doing

anything yet. that was the word from federal reserve chairman ben bernanke this week testifying before a congressional committee. he said if the economy needs help, if europe worse rns, the fed is prepared to step in and europe is still a concern. >> the situation in europe poses significant risks to the u.s. financial system and economy and must be monitors closely. as always, the federal reserve remains prepared to take action as needed to protect the u.s. financial system in an economy in the event of financial stresses escalate. >> the fed chairman's testimony helped cool off the markets on thursday which had been hoping for a clear he sign of easing. the dow had its best day of the year wednesday, up better than 280 points. the markets continued to rise on friday. prospects for home sales continue to be boosted. changes brewing at starbucks. next week the company will start selling single-serve keurig coffee pods in the stores.

starbucks plans to introduce its own single serve coffee machine this fall. the bulls were back in force this week but it is not exactly time to breathe easy. that's what the chief investment strategist at research partners says. let's start with the fed. chairman ben bernanke this week, testimony before congress. he basically said we're there. the fed is ready to do more to help the economy if and when europe worsens, though of course we know this is not imminent. was that what the markets wanted to hear? do you agree that this is where things are going, the fed with stimulus? >> i have no doubts that the fed will be there if there is some sort of big financial dislocation as a part of europe. the problem as it stands now seems me though is that have you diminishing marginal return of quantitative easing or more easing on parts of the fed. interest rates are already so low what wonders what more monetary stimulus can do. that's also i think what chairman ben bernanke was

suggesting, was say, listen, congress, it is more on you at this point. if you want the economy to grow, monetary policy has probably run its course. we can help out with liquidity but can't help out with larger changes that need to be happening. >> we've corvered this fiscal cliff a lot looking at this issue where year end tax cuts and spending programs will expire. the need to raise the debt ceiling will also be an issue. ben bernanke is also urging congress to avoid the severe fiscal tightening in thor in term. do you think anything will happen before the elections? >> sadly be i don't think so. i would say chances are 100-1 they're kind of successful in dealing with this. the big implication of this though is that for defense companies and health care companies that face sequestration of spending,

they're going to have to let their employees know by september there is a significant possibility of them being laid off early in 2013. so oddly the bigger impact from the fiscal cliff could be more felt in 2012 rather than 2013. so ultimately, i think most people believe that the can will be kicked down the road -- obviously you're probably going to have to do that in a lame duck session in congress in eight weeks. >> another big story this week was china cutting interest rates. i thought was interesting. first time since 2008 that china actually lowered interest rates. it helped start a rally in stocks on thursday. where do we go from here? is this all central bank -- china cutting rates or ecb or the fed? >> i think so. europe is clearly already in recession. the u.s. in my view is a nominal gdp terms very, very weak. china has something the other countries don't have though. it has money. and it doesn't necessarily worry

about a return on capital. so the fact that inflation is moving now to china means it wouldn't surprise me if you saw more fiscal stimulus within china to get people working. in my view china actually isn't that big a worry. >> but you are bothered about europe. >> very much so. >> tell me what's going on there. >> listen. i think you've gotten to a point where the bill has come due and you have to figure out whether the creditor nations -- germany, finland, netherlands -- are going to pony up and get more fiscally integrated with the rest of europe and that's a big unresolve question. the elites want it. political elites want it. but whether the populist, the average man on the street wants that, no one really knows. the graek electioeek elections h will be important to see if the so-called preripheral nations want to be part of the political union. the economics and financial part of this is pretty clear. what the actual politicians and the constituencies choose though

is really very much up in the air. >> what do you do from an investment standpoint at this point? the retail investor in the face of all of this. >> i have to say -- i'm sorry to say this, but i think cash is not a bad option for the retail investor but i do think over the next six months, candidly -- sounds like hyperbole but this could be one of the most important periods in economic history in the next six months in terms of how you resolve europe, how you resolve the fiscal cliff. i think you should have more cash than usual. then i also think it is very consensus type of idea, but if you are in the equity market, you want to be in as high a quality company as you can with balance sheets that can withstand whatever kind of tempest that winds up coming about as a function of these big macro concerns. it sounds like you think we could be in for a sell-off. >> i think we can. i think it is going to be a very rocky summer. i certainly don't see anything in the offing right now that would suggest that you would have a run-away bull market. i think there could be periods

which are somewhat cyclically strong but we are at the point where we need structural change to get the start of a new bull market. >> we'll leave it there. jason, thank you. this week nasdaq announced a $40 million compensation fund to cause glitches with the ipo offering facebook. some say to offset the cost it could be up to $200 million. i spoke to the ceo of nasdaq this week about the day one difficulty of getting facebook to the public and that stock's wild ride. this was the biggest ipo in your history. who's in charge? where were you? >> certainly the people who run the operation day to day were in charge. it is important to recognize that we had several open lines going. one was an open line to our customers. a separate open line internally to nasdaq. there was rampant communication going through both lines and

that was the way to do it. understand, it's important to note that this ipo we've run at 450 times before, quite successfully. obviously not with the volume we saw with facebook. the key decision we had to make was that we could operate this cross and that was the input we got from -- really seasons nasdaq people. we can run this cross, which we did do. >> is anybody's job on the line? whose head is going to roll about this? >> we have to come out of this as a stronger, better organization. we've been in intensive discussions internally. we want to get the external viewpoint. clearly we can improve. we will improve. >> is your job on the line, bob. >> that's not for me to say. i think my track record over the last nine years speaks for itself. up next on the "wall street journal" -- bill clinton talks tax cuts, the economy and private equity. why my interview with him may have driven a wedge between the white house and the former president. and later, life in the start-up nation means shopping like you've never shopped before. commerce, technology and how one

internet founder found what women want.

make no mistake about it, former president bill clinton said he is in favor of extending the bush tax cuts which expire at year end. he also does not exactly see eye to eye with president obama when it comes to the role of private equity. i spoke with bill clinton this week in an interview that generated a lot of controversy about taxes, the budget, and reducing america's debt. >> we should have a long-term debt reduction plan. you can't have a balanced budget unless have you three things. you got to have growth, spending restraint and an adequate revenue stream. so it is just a question of how you think you get those things. >> what about this upcoming fiscal cliff? a lot of people are worried and the markets certainly have been reacting to the idea that these bush tax cuts will expire at year end, along with the spending programs that will

expire. should those programs and those tax cuts be extended? >> what i think they should do is to find a way to keep the expansion going. and i think the -- as weak as it is here, unemployment in the eurozone i think is 11% and germany's doing well but -- and a lot of the small countries are doing extremely well, many of which are not in the euro. but they're trying to figure out a way to promote growth and what i think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what's necessary in the long-term debt reduction plan as soon as they can, which presumably will be after the election. >> does that mean extending the tax cuts? >> well, i think what it means is they will have to extend --

they will probably have to put everything off until early next year. that's probably the best thing do right now. but the republicans don't want to do that unless he agrees to extend the tax cuts permanently, including for upper income people. and i don't think the president should do that. that's what they're fighting about. i don't have any problem with the extending all of it now, including the current spending levels. they're still pretty low. the government's spending levels. but i think they look at it because there's a recession. issue is not whether they should be ecextend for a few months. issue is the price the republicans put on that issue is the permanent extension of the tax cuts which i think is in error. >> something's got to give. if we don't deal with this november, you probably don't deal with it until 2013. in the meanwhile the markets and economy hang in the balance. >> we don't want to do anything

to roil the markets anymore than they already are. but i think the president is right about not wanting to make any commitments that will constrain our ability to have a long-term debt reduction plan, because two years from now, three years from now, five years from now, we need to be bringing this deficit down when the economy grows, because then you'll have the private markets needing capital and if the government's taking so much of it to finance the debt, interest rates will go through the roof. so the trick is to promote growth now while they're literally zero, interest rates, and to keep your options open to deal with the deficit in a responsible way going forward. >> you've been very fair minded and sort nft middle of the aisle. you even recently complimented bain captain and romney's record. it seems that there are these attacks against private equity, against wealth have turned people off. >> well, the american people are remarkably -- one of our grave

characteristics is we don't resent other people doing well. we want people to do well. we like it when people make money but we want them to do it in a way that benefits the overall economy. you have examples of private equity doing good and bad things over the last decade. you can look -- if you go in and there's a company that's not doing well, that's failing, and you buy it and you have to impose some economies there and cut-backs because you're trying to turn it around so it can thrive in the economy, whether you succeed or fail, that's a good thing to do. and you can't do it. if you go in and buy a company and intentionally load it up with dead, loot its assets, and then the people lose their jobs and their retirement, and they lose the jobs earlier than they would have and they lose benefits they otherwise wouldn't have lost, that's a bad thing. so to make a judgment on that you have to know a lot of facts about every case. >> is tax policy fair right now? the president talks a lot about

fairness in taxation, and yet, what, the top 1% or 5% pays 40% of the tax. 50% of the people pay no income tax at all. so what should tax policy look like? >> first of all, minimum tax of 30% is not all that high. if you look at the percentage of gdp going to taxes in america, compared to every other wealthy country in the world, there are only of the top 31 countries, i think we're 29th in the percentage of total tax take. as a whole in the country, our tax rates are not out of line. and the problem in having this conversation now is, when i was president, we had a booming economy, most people didn't resent those tax breaks. keep in mind, even middle income people were paying slightly higher taxes when i was president. everybody was. >> so what is your idea to get this economy back on track? i mean everybody wants to hear what you have to say.

you oversaw an economy during the best of times. the last president to balance a budget. >> i think in the country -- this european thing is having a bigger impact than people know. >> how much is europe and how much are the president's policies. >> the thing that's cost jobs here is the congress policies. if the congress had enacted his jobs plan, we know we'd have 600,000 more state and local workers still working and we know we'd have an infrastructure program going which would have some more jobs. so the jobs numbers would have been better there. the only part of the jobs plan that the congress enacted was to continue the payroll tax cuts that had been previously instituted. so i think that that's a problem. i think we could get a quicker recovery if we could reform the corporate tax laws, lower the rates, broaden the base, and offer the corporations a chance to bring the money back free now if they would invest at least a

portion of it in the infrastructure back where they get a very good return on investment. very good. and then we could put the american people to work. my thanks to former president bill clinton. after the interview, by the way, mr. clinton apologized for those comments and his office issued a statement clarifying his remarks, saying, "he supports extending all of the cuts in 2010 as part of the budget agreement but does not believe the tax cuts for the wealthiest americans should be extended again." now sources tell me that statement came after pressure from the white house to change his stance. up next on the "wall street journal report" -- another internet company that may be worth billions. how gilt group shopping by store. one of the founders joins me next. oud is made of bedrock. concrete. and steel. our cloud is the smartest brains combating the latest security threats.

it spans oceans, stretches continents. and is scalable as far as the mind can see. our cloud is the cloud other clouds look up to. welcome to the uppernet.

welcome back. gilt.com is the online address for one of the technology industry's hotettes start-up stories. in 2007 gilt started bringing discount luxury fashion to online consumers with high noon flash sales and ensured that lunch time would never be the same again. alexis maybank is founder and chief strategy officer at gilt group and co-author of "by invitation only." alexis, great to have you on the program. thank you so much for joining us. it is a great story and particularly in this world of technology start-ups. the book tells the start-up story of your daily online sample sales e-commerce site.

we live in a pretty entrepreneurial world already. i know that. but why do you think gilt group was such a success and really resonated? >> there are a couple things. one, clearly we hit a chord with consumers. many of our 5 million members, men and women, are putting us into their daily schedule. in templts way we started, the most common form of failure comes from a team that doesn't gel. we had a team that was not just skilled complements to one another but more importantly personality complements. we really covered each other's blind spots. >> this was something that you wanted. you were always looking for designer clothes at discount prices. >> yes. my co-founder and i used to sneak out of our day jobs in new york to go to invite-only designer sales. we loved it. we knew there would be other customers nationally who would want to shop this way. we took that experience and parlayed it in gilt group. >> what a girl's girl. that's what i used to do, too.

so the company serves 5 million customers reportedly worth a billion dollars but has yet to turn a profit. take us through your vision. what's your take on the growth of the business? how do you make money? >> our core business is doing very, very well but because of the competitive industry we are in right now, the need for growth, the need for scale, we're continuously investing in new businesses, whether that's expanding into travel, home, other categories for us, or whether it's investing more in technology that keeps us on the forefront. mobile shopping is key for us, is a huge form of how people are shopping on our site today. investing further in the use of data to make our experience the most personalized shopping experience on the web is really key to how we move forward as a business. >> so you're a founder of gilt but you've held many individual jobs. want to talk a bit about your resume. you've been a ceo, head of marketing, e-mail customer support. how has that diversity shaped how you see this company? >> there are two types of

founders. think you're right. there's one that wants kind of to be at the helm no matter what and there is another type. i think i'm this type -- that wants to see the business grow as large as it possibly can no matter what role i'm personally in helping and aiding it. i watched founders as an early member of the ebay team go through a number of different roles so early on -- and i would say this to employees that i was hiring as well -- that in a hypergrowth business, our roles could change as frequently as once every six months. if you watch employees fight against it, it could actually cause a lot of turnover, a lot of churn. we were very clear at the beginning that flexibility was key to our culture. >> for your fans out there, what's hot right now in terms of designer apparel or -- >> it's all about brights for the spring and summer. go long on that. >> okay. good advice. alexis, great to talk with you. up next on the "wall street journal report," we take a look at the news this coming week that will have an impact on your

money. and before the break, here's a look at how the stock market ended the week.

for more on our show and our guests, check out the website wsjr.cnbc.com. follow me on twitter and at google plus. now a look at the week ahead. apple's worldwide development conference kicks off in san francisco monday.

techies will be watching for any new product and application announcemen announcements. on wednesday, jpmorgan's ceo jamie dimon will testify about jpmorgan chase's multi-million dollar traysing loss. also we'll get total retail sales for may. the consumer price index out also on the 13th. the 14th, the consumer price index is out. it tracks inflation at the consumer level. that will do it for us today. thanks for joining me. my guest next week, laura tyson will be here. each week keep it right here where wall street meets main street. have a great week, everybody. i'm see you next week jend. [ male announcer ] it would be easy for u.s. olympian meb keflezighi

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